Supreme Court directs banks to meet receiver to finalize Amrapali projects financing proposal

SC directs banks to meet receiver to finalize Amrapali projects financing proposal

The Supreme Court of India (SC) directed the Indian Bank Association (IBA) and representatives of other banks to meet the court-appointed receiver regarding the Amrapali Case for ensuring that funds can be raised for unfinished projects in Noida and Greater Noida

Several homebuyers had invested in housing projects for more than eight years and they are yet to receive possession of their homes in Amrapali projects. The Amrapali Group has allegedly manipulated approximately Rs 6,000 crore of funds, which it had collected as advances from homebuyers and invested in the company's various projects across India. The estimated cost of completion of pending projects of Amrapali Group is approx. Rs 8,500 crore. The government's construction arm the National Building Construction Corporation Limited (NBCC) is engaged in completing the unfinished projects.

The Directors of Amrapali Group Anil Sharma and Shiv Priya were arrested in January 2020 by the Enforcement Directorate (ED) in connection with their role in the financial fraud committed by the firm and have since been serving time in jail. They were arrested under the Prevention of Money Laundering Act, 2002.

On 19 December 2020, a Special Court had granted the Enforcement Directorate (ED) four-day custody of the Amrapali Group's Chief Financial Officer (CFO), Chandra Wadhwa, for interrogation in a multi-crore fraud case. A plea for bails was filed on the behalf of the directors which was rejected by the High Court of Allahabad (HC) on 15 December 2020. The issue of Amarpali Project financing by banks is a long pending problem and it needs to be sorted at the earliest.

The SC on 23 July 2019 took strict action against the builders for cheating the homebuyers and ordered the cancellation of the registration of the Amrapali Group under the Real Estate (Regulation and Development) Act, 2016.

The SC gave the directions on 4 January 2021 after receiver R Venkatramani informed the SC that he was not getting adequate response from banks regarding his proposal for financing Amrapali projects. The SC accordingly, directed the advocates who are representing the banks to meet the receiver and submit their final proposal.

The SC also asked the receiver to go through the response filed by the promoters of the embattled firm Anil Kumar Sharma and asked to submit a report of diversion of funds done by him. It will take a final decision on the next date of hearing i.e. on 11 January 2021.